Your Ultimate Guide to Hiring Employees in Italy

Picture this: You're keen to establish a business presence in Italy and looking to build a robust Italian workforce. However, your previous attempts at hiring employees in Italy were unsuccessful, possibly due to misunderstandings within the workplace or premature employee departures.

We understand that navigating the Italian employment landscape can be complex, with its own set of rules, regulations, and cultural expectations. And so hiring the perfect employee in Italy can be quite challenging.

It's a long game, from finding the best ones to retaining the best ones. But don't fret that is why we are here to help you!

In this comprehensive guide, we walk you through the essentials of hiring employees in Italy. From sharing how exactly can you hire employees in Italy to contract types, labor regulations, and practical actionable tips to developing a solid contract, we've got you covered.

Let's get ready to unlock the secrets of the successful hiring of employees in Italy!

Decoding the Italian Labour Market

The Italian labor market is diverse, with industrial activity concentrated in the north and agriculture and tourism prominent in the south.

Here are some main features of the Italian labor market:

  • The main sectors ranked by GDP are services, manufacturing, construction, and agriculture.
  • Fixed and full-term employment contracts are quite common.
  • The year 2023 has seen a decline in unemployment rates in Italy.
  • The northwest region has the largest share of employment demand.
  • Lombardy is expected to have the highest demand among regions.
  • The National Recovery and Resilience Plan will play a significant role in job creation in Italy.
  • The NRRP will drive the green and digital transition, resulting in increased demand for jobs in green economy, IT, and telecommunications.
  • Professionals in mechatronics, agri-food, construction, and green and digital sectors are expected to be in high demand.
  • There will be a need for professionals with a mix of e-skills, including software analysts, and designers, electronic and telecommunication engineers, and network administrators.

Why Hire Employees in Italy?

Italian talent is one of the most highly skilled workforces globally across various industries, including engineering, design, fashion, automotive, and technology.
If you are a business keen on expanding and partaking in global employment, here is why you must hire employees in Italy!

Rich History

Italy boasts a rich history of innovation, craftsmanship, and creativity. Not only has it been the center of the Roman Civilization and the Catholic Church but has also served as the origin of significant international movements that have had a profound impact globally, including Renaissance, Baroque, Neoclassicism, Futurism, etc. As a business when you hire in Italy, you can potentially tap into this rich culture and benefit from fresh ideas and unique perspectives.

Strategic Location

Strategic Location

Italy exists right at the center of the Mediterranean Sea, making it an attractive base for businesses targeting consumers across the European Union, Northern Africa, and the Middle East. Italy's strategic location in the central Mediterranean results in a significant volume of global maritime activity flowing through its ports. Approximately 20% of world maritime traffic, 30% of fuel traffic, and 25% of container traffic pass through Italy's port infrastructure. It offers proximity to major European cities, access to international trade routes, and a well-developed transportation infrastructure.

Cultural Diversity

Italy offers profound cultural diversity across its twenty regions. By hiring employees from diverse backgrounds, companies can foster a pluralistic and multicultural workplace environment that breeds creativity, collaboration, and a broader vision.

Strong Industrial Sectors

Italy has strong industrial sectors, including manufacturing, fashion, automotive, design, tourism, and food and beverage. In particular, Italy's manufacturing sector maintains a strong position globally ranking seventh in terms of value-added, fourth in product diversification, and second in export competitiveness. It also has a higher investment rate compared to its main European competitors such as Germany.

Language Advantage

If your global business seeks to target the local Italian market, then having employees proficient in the Italian language is a necessity. Not only does it facilitate communication with customers, suppliers, and partners but also helps navigate local regulations and business practices amicably.

Government Incentives

The Italian government offers various incentives and support programs to attract foreign investment and promote job creation. These incentives may include tax breaks, grants, and subsidies, which can help reduce the cost of hiring and operating in Italy.

Read up more on government initiated Italian tax breaks in our article here

Access to the EU Market

Italy is a member of the European Union, providing businesses with access to a large consumer market and simplified trade within the EU. Hiring a workforce in Italy can be advantageous for businesses aiming to expand their presence within the EU.

How to Hire Employees in Italy?

Now that you are aware of why Italian talent is one of the best globally, let us guide you through the avenues available to you for hiring employees in Italy.

  1. Establish a legal entity in Italy

    If you're a company seeking a physical presence in Italy or aiming for long-term investments in the market, then setting up a local entity for hiring employees in Italy can prove to be highly beneficial for you. However, beware that navigating the intricacies of Italian labor laws independently is going to be hard.
    You'll be expected to ensure compliance every step of the way since noncompliance at any stage of the hiring process can prove to be damaging to your business's reputation.
    This means classifying employees, understanding social security, adhering to local collective bargaining agreements, and formulating contracts that meet regulatory standards amongst addressing other crucial concerns.

  2. Collaborate with an Employer of Record in Italy

    The other option is to partner with an Employer of Record in Italy, which is a legal entity that hires, pays, and manages your distributed workforce on your behalf. Leveraging an EOR eliminates the need to establish a legal entity in the country and helps you make swift hires and achieve full operational readiness within days!

    Pro Tip

    By availing of EOR services from an exclusively Italian EOR provider like Peoitaly you can expect to receive more than just operational support. Gain in-depth knowledge of local labor laws, stay updated on legislative changes, and receive comprehensive compliance support alongside seamless onboarding, payroll administration, benefits management, and risk mitigation.

    It is a super flexible option that allows you to test the waters of the Italian market before committing to long-term investments in the country.

    PEO vs. EOR – What's the difference?

    PEO vs. EOR – What's the difference?

    While PEO and EOR come to be usually confused and hence interchangeably used, it must be noted that a PEO is a company that provides a comprehensive suite of HR services including payroll, benefits, and tax compliance, acting as the employer of record. On the other hand, an EOR assumes legal obligations for employees, such as contracts and payroll management, without offering extensive HR services like a PEO.

    We've prepared this chart to help you understand the difference between PEO and EOR:

    EOR vs. PEO
  3. Work with a Freelancer

    The next option available to you is to work with a freelancer in Italy. Conduct background checks on the freelancer and ensure that the freelancer you hire has the Partita IVA, which is the VAT number (and EORI for international transactions). As per Italian labor law, every business, company, and freelancer must have one. To ensure a successful freelance collaboration, sign a contract, set clear expectations, and be fair on the pricing of the deliverables.

Understanding the Legal Framework and Labor Regulations for Hiring Employees In Italy

When it comes to hiring workers in Italy, it is essential to have a strong understanding of the country's labor laws and legal regulations in order to minimize any potential risks that may arise from non-compliance. To provide you with a general overview of what it entails to hire employees in Italy, we have simplified the fundamental aspects of labor regulations.

Let's dive in!

Employment contracts in Italy

According to Italian employment law, there are different types of employment contracts in Italy and they vary in terms of length, scope, rights, and obligations. Let's have a look at the main ones!

Fixed-term Contract - Contratto a tempo determinato

Fixed-term Contract - Contratto a tempo determinato

  • Contratto a tempo determinato is an employment contract with an expiration date.
  • It is usually limited to 12 months (or 24 months under specific circumstances).
  • It can be extended or renewed, but cannot exceed 24 months (with exceptions for seasonal contracts).
  • It should be converted into a permanent contract after a specified time.
  • Termination by the employer must be based on just cause, otherwise, compensation will be sought.

Permanent Contract- Contratto a tempo indeterminato

  • Contratto a tempo indeterminato is an employment contract with no expiration date.
  • Both employer and employee can terminate the contract with a notice period specified in the CCNL (National Collective Bargaining Agreement).
  • The employee is not required to give notice in case of a serious contract breach (such as non-payment of wages).

Apprenticeship Contract- Contract di apprendistato

  • Contract for young people aged 15 to 29 or those receiving unemployment benefits.
  • Involves professional training to develop job-specific skills.
  • Can be aimed at obtaining professional or technical qualifications, higher education diplomas, or access to regulated professions.
  • Converts to a permanent contract if not terminated by either party after a certain period.

On-Call Employment Contract- Contratto a chiamata

  • As per this contract, the employee works discontinuously or intermittently.
  • May be called to work for short periods or a few days a week.
  • Maximum duration is 400 working days in three years (with the exception of the tourism sector).
  • If the contract exceeds the maximum period, it becomes permanent.
  • Some contracts may include a monthly indemnity if the employee is required to be always available.

Multiple On-Call Contracts

Employees can have multiple on-call contracts simultaneously, provided the companies involved do not compete with each other.

Working Hours in Italy

In Italy, the typical working week consists of 40 hours spread over five days for full-time employees. However, certain industries may follow alternative schedules such as a six-day workweek with shorter daily hours. Within regular working hours, there are instances of split working hours that include a designated lunch break. Additionally, there are 'shifts' where employees work continuously for 7 to 8 hours, with lunch breaks included in their salary.

Keep in mind that 11 hours of rest must be respected between one shift and the next. Also, note that overtime work in Italy is limited to 48 hours per week.

Minimum Wage in Italy

Minimum wage

Italy does not have a national minimum wage. Instead, minimum wage standards are established through sector-specific collective bargaining agreements and employment legislation. The minimum wage in Italy can differ based on factors such as industry, geographical location, and level of experience.

Employer Tax in Italy

In Italy, employers are required to pay approximately 30% of their employee's salary as social security contributions.

Individual Tax in Italy

In Italy, the taxation of employees varies based on their income bracket, ranging from 23% to 43%. Additionally, employees are subject to social security contributions tax of approximately 10%.

Annual Leave in Italy

Every employee in Italy has the right to receive paid annual leave. The Civil Code stipulates a minimum of eight days of paid leave specifically for domestic employees. For all other employees, the minimum duration of annual leave is determined by collective agreements, typically guaranteeing at least four weeks of paid leave per year. Certain agreements may offer additional vacation time based on seniority. While on vacation, employees continue to receive their regular salary, excluding any allowances directly related to their work.

Public Holidays in Italy

Employees in Italy are entitled to observe 13 public holidays, in addition to the local Patron Saint feast day.

January 1, 2023 New Year's Day (Capodanno)
January 6, 2023 La Befana (Epifania)
April 09, 2023 Easter (Pasqua)
April 10, 2023 Easter Monday (Pasquetta)
April 25, 2023 Liberation Day (Festa della Liberazione)
May 1, 2023 Labor Day (La Festa del Lavoro)
June 2, 2023 Republic Day (Festa della Repubblica)
August 15, 2023 Assumption Day (Ferragosto)
November 1, 2023 All Saints Day (Tutti I Santi)
December 8, 2023 Immaculate Conception Day (Immacolata Concezione)
December 25, 2023 Christmas Day (Natale)
December 26, 2023 St, Stephen's Day (Santo Stefano)
Patron Saint The day varies according to workplace location (e.g. Milan 7 December - Sant' Ambrogio).

Paid Time Off

Vacation Time

As per Italian labor law, all employees are entitled to a minimum of four weeks of paid annual leave.

Parental Leave

The Italian labor law provides clear guidance on parental leave entitlements.

Maternity Leave (Congedo di maternità) in Italy

Female employees in Italy are entitled to a minimum of 5 months of paid maternity leave. Out of these, two months must be taken before childbirth, while the remaining three months are to be taken after childbirth. The cash maternity allowance is equivalent to 80% of the employee's salary and is payable for the entire 5-month period.

If there's a premature delivery or an extended hospital stay, employers are required to extend the maternity leave accordingly. In the case of guardianship or adoption, the 5-month period begins from the date when the adopted child officially becomes part of the family.

In the unfortunate event of a miscarriage occurring beyond the third month of pregnancy, the allowance is provided for a duration of 30 days. However, if the miscarriage happens after the 180th day it is considered equivalent to a 'birth' for all legal purposes.

Paternity Leave (congedo di paternita) in Italy

Paternity leave or 'congedo di paternita' in Italy is a mandatory ten-day paid leave that can be taken separately and claimed within five months of the child's birth. It is granted concurrently with the mother's maternity paid leave.

In cases where the mother may be unable to care for the baby due to serious circumstances, the father has the right to take leave from work and receive the corresponding allowance. Additionally, within the five months after the child's birth, the father may be eligible for an additional day of unpaid leave. However, this day can be converted into paid leave if the mother agrees to transfer it from her own maternity line.

Read more about paternity leave here!

Sick Leave in Italy

In Italy, employees have the right to 180 days of paid sick leave per year, which is provided through the assistance of the National Institute for Social Security (INPS). For employees under permanent or fixed-term contracts, it is common to receive their full salary for the initial three days of sick leave, as specified in collective bargaining agreements such as the Commerce CBA.

Termination and Severance in Italy

The employee termination process in Italy can be complicated and subject to numerous requirements and procedures. As an employer, here are some crucial considerations for you:

Notice Period in Italy

In Italy, both employers and employees are required to provide notice when initiating employment termination. The specific notice period is outlined in the collective bargaining agreements and mainly depends on the employee's position and duration of service. If employees have served for a period of less than five years, then their notice period may range from 15 days to a month. On the other hand, Italian employees who have served for more than 15 years, are entitled to up to 6 months notice period.

Probation Period in Italy

Some Italian employers may implement a trial or probation period usually lasting 3 months, with a maximum duration of 6 months. During this period, employment contracts can be terminated without notice or severance pay even without a justifiable reason.

Severance Pay in Italy

Upon termination of the employment contract or redundancy, Italian employees have the right to receive severance pay, known as TFR (Trattamento di Fine Rapporto). This payment is calculated by aggregating all the provisions which is typically equivalent to the gross annual salary divided by 13.5. A certain percentage of withholding for the Pension Adjustment Fund is then subtracted.

Insurance in Italy

In Italy, employers have a legal obligation to make regular premium payments to provide insurance coverage for their employees in cases of work-related accidents, injuries, and healthcare issues. The management of these insurance policies and the payment of claims is handled by INAIL (Istituto nazionale per l'assicurazione contro gli infortune sul lavoro) the national institute for insurance against workplace accidents.

Discover valuable insights on Italian labor employee benefits and social security by exploring our exclusive guide here!

Health and Safety Regulations for Hiring Employees in Italy

The Italian labor law also stipulates that the employer is responsible for ensuring the health and safety of workers at the workplace. For this the employers are expected to do the following:

Maintenance of a Risk Assessment Document (DVR)

The Risk Assessment Document (DVR) is a mandatory document for all Italian companies and identifies workplace risks, evaluates them, and implements improvement plans to eliminate or reduce dangerous situations. The document involves the employer, the Prevention and Protection Service Manager, the doctor, and the workplace representative.

Appointment of a Safety Manager (RSPP)

A Safety Manager is an important figure appointed by employees to ensure safety in the workplace. They identify dangers, collaborate with employers in risk assessment, and develop safety measures and procedures. They also propose training programs and provide workers with information on potential risks.

Providing Health and Safety Training Courses

The Italian law also requires employers to provide necessary risk assessment training to their workers. General and specific training courses are mandatory based on the level of risk associated with different job sectors. Other specific training courses are required for supervisors, safety executives, and health and safety managers.

Partaking Health Surveillance

Health surveillance involves appointing a competent doctor who conducts medical examinations to evaluate workers' fitness for their jobs. The doctor specializes in identifying the symptoms caused by various workplace hazards.

Managing Emergencies

The Italian labor law also provides instructions for safeguarding and evacuating people, confining fires, and extinguishing them. Companies are expected to appoint emergency teams, including firefighters and first aid officers, who receive specific training based on fire risk and the number of employees.

Safety and Health in Construction Sites

The Italian law identifies additional obligations for construction sites, including appointing safety coordinators, developing Coordination Safety Plans, and creating Operational Safety Plans for subcontractors. Compliance costs vary based on the type of activity and the number of employees.

Expenses Associated with Safety Obligations

The cost of health and safety consultancy in Italy depends on the nature of the business and the number of employees. So costs will typically pertain to safety manager services, safety training courses, and appointment of occupational medicine doctors.

Since employers in Italy are co-responsible for workplace accidents or occupational risks, it is crucial to seek thorough guidance from experienced Italian HR professionals to mitigate non-compliance that may lead to serious sanctions for your business. At Peoitaly, we strive to do just that to protect your business and your employees.

Read more about Health and Safety in the workplace in Italy here!

Italian Employment Contract Tips and Suggestions For Employers

It goes without saying that the basis for a healthy employment relationship stems from an unambiguous employment contract that clearly states employer expectations and employee responsibilities.
Here are some tips and suggestions with regard to employment contracts for global companies seeking to make local Italian hires for their companies:

Use Clear and Precise Language

Use clear and precise language in your contracts to ensure that all parties involved understand their rights, obligations, and the scope of the agreement. Keep in mind that the usage of overly complex and technical terms may lead to confusion and misinterpretation.

Expand on Key Terms

Clearly define any key terms used in the contract to prevent misunderstandings. This will help ensure that everyone is on the same page regarding the meaning and intent of the specific terms or concepts.

Specify Essential Elements

Ensure that your contracts include essential elements such as the names and contact information of the parties involved, a clear description of the goods or services being provided, the terms of remuneration, length of service, delivery or performance timelines, and any applicable warranties or guarantees.

Specify Italian Law

Since you'll be an employer in Italy, the employment contract must specify the Italian constitution as the governing law. This will ensure clarity when it comes to legal requirements and consistency in the interpretation of the contract. It will also provide a framework for solving potential workplace disputes and allow employees to work compliantly.

Pro Tip

To navigate the ever-changing landscape of Italian employment laws and to seamlessly hire employees in Italy, rely on expert advice from experienced professionals at Peoitaly

Incorporate a Dispute Resolution Clause

Your Italian employment contract must also include a dispute resolution clause that outlines the preferred method for solving any workplace disputes that may arise. Options can involve negotiation, mediation, or arbitration. This will help prevent costly and time-consuming litigation.

Consider non-disclosure and Confidentiality

If your work company works with sensitive information, consider adding a non-disclosure and confidentiality clause in the contract. This will protect proprietary or confidential business information.

Review and Update Onboarding Contracts Regularly

Make it a point to review and update your employee contracts regularly to ensure relevance and compliance with any changes in Italian labor laws or regulations.

Seek Legal Advice

Get in touch with a legal advisor or HR service professionals exclusive to Italy to receive guidance and ensure better compliance with Italian laws to help protect your company's interests.

Build Your Global Team in Italy Today!

Rome wasn't built in a day and the same can be said for building a winning team in Italy- without an EOR.

This means you need a coherent, robust hiring strategy in place to successfully tap into the Italian market, and establish your business successfully. When you avail the services of a credible EOR like Peoitaly, you not only gain access to our expertise and knowledge of local labor laws and regulations but also ensure compliance and mitigate potential risks associated with hiring and managing a team in Italy. We assure you, that with us onboarding talent becomes a breeze.

We are your trusted partner in handling the major aspects of employment such as payroll, benefits administration, tax compliance, and HR management. We help you adapt to the demands of the Italian market so that you can pivot your energies towards your business goals. Get in touch with us today and propel the hiring of employees in Italy to build your global team!


What is the income tax in Italy?

The standard rates for income tax in Italy range from 23% to 43%.

What is the probationary period in Italy?

The duration of an employee's probationary period in Italy is contingent upon the nature of their role. While there is no set minimum requirement for the probationary period, it typically does not exceed six months. The specific length of the probationary period is often determined by collective bargaining agreements (CBAs).

Can you work part-time in Italy?

Yes, it is possible to work part-time in Italy. Part-time work contracts in Italy can be either fixed-term or indefinite-term, depending on the agreement between the employer and employee. The specific terms and conditions of part-time employment, including working hours, days of work, and remuneration, should be outlined in the employment contract.

What is the minimum wage in Italy?

Italy does not have a national minimum wage. Instead, minimum wage standards are established through sector-specific collective bargaining agreements and employment legislation.

As a global employer, is it easy to hire employees in Italy?

You can hire employees in Italy by setting up a legal entity or by partnering with an EOR. We recommend the latter option for ease in navigating the complex labor regulatory landscape in Italy.

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